LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Friday.
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FTSE 100 - WINNERS
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Pearson, up 4.1%. The education and publishing group swung to a loss in 2015 due to the huge restructuring it is undertaking to return itself to health, as sales also dipped in competitive markets and it said stability will start to return only by 2018. Pearson said it swung to a pretax loss of GBP433.0 million for the year to the end of December, compared to a GBP255.0 million profit in 2014, primarily due to the one-off costs the group will book for the restructuring programme. 2016 will be focused on restructuring plans, including cutting costs and attempting to simplify the structure of the group. It expects to complete the majority of the actions by the middle of 2016 and the full benefits should start to show on the profit line by 2018, when it expects stability to return to US college enrolments and the UK qualifications market.
Burberry Group, up 4.0%. The fashion house was upgraded to Buy from Neutral by Nomura. The bank has upgraded the luxury goods group ahead of it detailing the results of its operational review, an anticipation a change in its approach will be good for the market. Driving productivity measures should boost Burberry's valuation, it said, as would more discipline on cost and capital allocation.
Intu Properties, up 1.9%. The shopping centres owner returned to like-for-like rental income growth in 2015 following an improved performance in the second half, though its pretax profit dipped due to lower total valuation gains made on its portfolio. Intu said its like-for-like rental income grew 1.8% in the year to the end of December, compared to a 3.2% decline a year earlier. The group expects this to continue in 2016, guiding to like-for-like rental growth of 2-3%. Pretax profit, however, declined to GBP513.0 million, down from a GBP593.7 million profit a year earlier, as a significant decline in the valuation gain it made on its portfolio offset much lower financing costs for the business.
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FTSE 100 - LOSERS
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Royal Bank of Scotland Group, down 9.3%. The state-backed lender reported its eighth consecutive annual loss, with the state-backed lender still suffering in 2015 from the 2008 financial crisis, with the extent of the clean-up meaning there will be some delay to returning excess capital to its shareholders. The Edinburgh-based bank's net loss narrowed to GBP1.98 billion in 2015 from GBP3.47 billion in 2014. Adjusted operating profit, which strips out restructuring and litigation costs, among other items, fell to GBP4.41 billion from GBP6.06 billion, due to lower income and asset disposals. RBS recorded a fourth-quarter net loss of GBP2.74 billion, narrower than the GBP5.79 billion net loss recorded the corresponding quarter the prior year, but enough to drag down results for the entire year. Most of the bank's annual litigation and conduct costs came in the fourth quarter, at GBP2.12 billion. Across the year as a whole, those costs rose to GBP3.57 billion from GBP2.19 billion.
Sports Direct International, down 1.2%. The sportswear retailer said it will stop drawing down from its loan facility with Mike Ashley/Mash Holdings Ltd due to criticism it has received about related-party transactions and instead will solely use its revolving credit facility, which was recently increased to GBP788 million.
International Consolidated Airlines Group, down 1.0%. The British Airways and Aer Lingus parent reported a more than doubling in profit in 2015, as revenue grew despite taking a small hit to sales in the fourth quarter following the terrorist attacks in Paris. The group said its pretax profit in 2015 grew to EUR1.82 billion from EUR828 million in 2014, as revenue rose by 13% to EUR22.86 billion from EUR20.17 billion. IAG said it will pay a total dividend of 20 cents for the full year, including a 10 cent final dividend. Davy Research said the IAG results were at the top end of guidance. Cantor Fitzgerald Europe Research said IAG's earnings represented a small beat, with its 2016 guidance slightly ahead of consensus.
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FTSE 250 - WINNERS
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IMI, up 4.5%. The engineering group said its pretax profit and revenue fell in 2015, in line with the profit warning the group issued earlier in the year as it contended with tough markets. IMI expects the tough conditions in its markets to continue in the first half and said margins are likely to decline further before some improvement is seen in the second half of 2016 as the benefits of its restructuring plans flow through. On the expectation of improvements on the horizon, the group said it will hike its final dividend slightly to 24.5 pence from 24.0p, taking its total dividend up to 38.4p from 37.6p.
Kennedy Wilson Europe Real Estate, up 2.8%. The property investor hiked its first quarterly dividend for 2016, as it reported an increase net asset value following a strong portfolio valuation increase in 2015. The company said its EPRA net asset value was up 15% at the end of 2015 to GBP1.53 billion from GBP1.39 billion in 2014, chiefly driven by portfolio valuation increases. At the end of the year, Kennedy Wilson's portfolio was valued at GBP2.80 billion, up from GBP1.50 billion, after a number of acquisitions during the year. The group said it had paid 35.0 pence per share in dividends in 2015, but declared a 12.0p per share dividend for the first quarter of 2016, up from 10.0p in the last quarter of 2015. This represents 48.0p per share annualised, meaning a 37% increase in prospective annualised dividend.
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FTSE 250 - LOSERS
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Rightmove, down 4.2%. The online property portal said its pretax profit was up 16% to GBP144.3 million in the year to the end of December, from GBP124.6 million in 2014, boosted by the 15% increase in revenue to GBP192.1 million from GBP167.0 million. The company appeared to be unaffected by fellow property portal OnTheMarket's bid to take a larger market share, and said its pretax profit was lifted in 2015 by higher revenue, driven by a strong audience growth and an increase in its average revenue per advertiser. OnTheMarket made an effort to expand its presence in the market, having set a rule that to be listed on its portal, an agent must drop either Rightmove or Zoopla Propety Group. Rightmove said the risk was unchanged in terms of this increased competition, and has taken steps to mitigate any impact, through marketing and investment.
William Hill, down 2.4%. The bookmaker reported a drop in profit in 2015, as revenue fell slightly following a tough comparative period which included the football World Cup and as it faced additional gambling duties in the UK, but increased its dividend payout ratio and announced a share buyback. The betting company said pretax profit in 2015 fell to GBP184.7 million from GBP233.9 million in 2014, as revenue decreased by 1% to GBP1.59 billion from GBP1.61 billion. William Hill will pay a total dividend of 12.5 pence for the year, a 2.5% increase on the 12.2p it paid in 2014, and said it has increased the dividend payout ratio to around 50% of adjusted earnings. It will also complete a GBP200 million share buyback over the next year.
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MAIN MARKET AND AIM - WINNERS
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Patagonia Gold, up 15%. The gold miner said production levels have been normalised at the Lomada mine but production from the site will be suspended, and said a heap-leach project will be developed at its Cap-Oeste project, both in Argentina. Patagonia said mining operations at Lomada will be suspended to the end of May after it experienced limited success in finding a viable mineable resource to extend the life of the mine beyond its current estimates. The mining equipment and team based at Lomada will move to the Cap-Oeste project, but production is expected to continue at Lomada until the fourth quarter of 2017 as irrigation of the leach pads will take another 18 months. The group will then develop a heap leach project at the Cap-Oeste mine, with initial development work to start soon and initial production due in the third quarter.
Thor Mining, up 9.1%. The miner said it has received AUD2.0 million in cash from the sale of its Spring Hill Gold project. Thor has agreed to sell the project to Australian company PC Gold Pty for a total of AUD3.5 million, but the sale was conditional on PC Gold securing an unconditional finance offer from an unnamed precious metal private equity fund based in the US.
MX Oil, up 7.9%. The oil and gas investing company said it has agreed terms on the sale of its investment in the Aje field offshore Nigeria to GEC Petroleum Development Co. Under the terms of the agreement GEC will have the right to acquire MX Oil's indirect investment in the Aje Field for a total of USD18.0 million. Initially, up to USD3.5 million will be advanced to MX Oil in three stages, with the first payment expected in March. GEC will then have the right to buy the investment, which MX Oil said is most likely to happen when initial oil production at the project starts.
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MAIN MARKET AND AIM - LOSERS
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Petroceltic International, off 37% at 11.41p. Worldview Capital Management made a bid for London-listed oil and gas company at a huge discount, claiming it believes the value of the equity in Petroceltic is close to zero. Worldview, which owns a 29.6% stake in Petroceltic, has been engaged in a war of words with the company of late, first attempting unsuccessfully to oust its chief executive and later making a series of accusations of corruption.Worldview, through the Sunny Hill bidding vehicle, made a cash bid of 3.00 pence per share for Petroceltic, valuing the company at GBP6.4 million. The price is at an 83% discount to Petroceltic's closing price on Thursday, but Worldview said it believes the value of Petroceltic's equity is "close to zero", reiterating its concern over the company's "precarious, and worsening, financial position". Petroceltic noted the offer in a later release and urged its shareholders to take no action at the present time.
Auhua Clean Energy, down 67%. The environmental technology company said its shares will be suspended from Monday as it continues to search for a new nominated adviser. The Chinese green energy company said it remains in talks with potential nominated advisers to take over from Grant Thornton, which will resign its role on Monday, but that it will not be able to make an appointment by the close of play on Friday. As a result, its shares will be suspended under AIM rules from Monday and will be cancelled from trading if it fails to appoint a new nominated adviser within a month.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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